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SXSW 2011 Day 2 check-in: The Vaccines go to church, Jack White takes it to the street and streaming music is the future

March 16, 2011 |  9:50 pm

Photo 1-1 About 1,200 miles separate Austin, Texas, and Los Angeles, but at the annual South by Southwest festival and conference, that distance can sometimes feel even greater. On the first full day of action at SXSW, early risers -- and patient ones -- could catch Jack White performing two songs in front of a bus, and U.K. upstarts the Vaccines giving a modern gloss to Buddy Holly-influenced rock, all while performing songs, in front of a church no less, that pondered dating a 17-year-old. 

Meanwhile, lines stretched for hours to get into the so-called "Fader Fort," which is now a SXSW tradition. This year's sponsor is Fiat, but the Fader Fort still looks and feels as if it were erected in a war zone, although instead of revolutionaries, there are models waiting to tell you about new cars, and full days of sets from nearly every blogger-buzzed artist in Austin. First up Wednesday was the keyboard-glazed pop of Tori Y Mori, who aren't even appearing at an official SXSW show. 

Inside the Austin Convention Center, four days of industry panels began with Martin Atkins, who has performed with Public Image Ltd. and was a founding member of industrial act Pigface, throwing muffins into the crowd while dispensing do-it-yourself advice, complete with plenty of four-letter words.

"If all the bands in your area have a guitar, bass and drums," Atkins said, "play a fish."

His message was one of staying independent, standing out and building momentum, urging acts that "free is the new black" and not to get too obsessed with the latest technology. "It's not how you communicate, but what," Atkins said, later urging acts to play the smallest venues possible for the simple sake of being able to say it was sold-out. 

As one-half of the now-defunct White Stripes, Jack White is surely afforded the ability to forgo such DIY and attention-grabbing strategies. Yet those in the know were treated to an impromptu White performance on the streets of Austin about noon. Though he played only two songs -- Buddy Holly's "Not Fade Away" and the White Stripes' "Dead Leaves and the Dirty Ground" -- word soon reverberated through the town about the "you-had-to-be-there" moment. 

Yet, as the day wore on, an unexpected music trend started to emerge: optimism. An afternoon discussion on digital music was not run afoul with the sales-are-down and sky-is-falling pleas of SXSW pasts. Even at a time when the industry is filled with rumors of further consolidation between EMI and Warner Music Group, EMI's "consulting head of digital marketing" Elizabeth Brooks took a measured approach.

"Our business has fragmented, and some of the problems the larger companies have is we still expect it to be a big business," she said. "It might be a lot of small businesses, or one company [that owns] many smaller businesses.

"There’s no template anymore," Brooks continued. "I think that’s wonderful. For a major label, our responsibility is to embrace that and roll with the change."

For Simon Wheeler, who heads up digital with independent label consortium the Beggars Group, that change has already arrived, and it's streaming music services. The popular European service Spotify, which is available in seven countries and has long been rumored to be headed for the United States, is already "the second or third" biggest digital account globally for the company, Wheeler said.   

Fighting the move toward streaming music isn't an option, Wheeler explained, but monetizing it is still a challenge. The fact remains that labels make more money off the sale of a digital single than a stream of one, yet consumers, said Wheeler, Brooks and electronic artist Richie Hawtin, have reached a consensus: They want near-instant access to music.

"People have shown what they want," Wheeler said. "That box is almost checked, so it's done." 

Brooks said streaming services could be a boon for the label, as digital sales, broadly speaking, do not boost catalog sales. As iTunes has grown, the catalog market has taken a hit.

"In an on-demand model ... you turn to your tried and trues -- the Beatles and Pink Floyd," Brooks said.

Wheeler conceded that even independent labels may have to drastically "shake up" their business models to deal with the smaller returns from streaming music, but was optimistic a business could be run. He praised Spotify, which offers users a premium paid service in addition to a more limited free option. 

"They came to the industry with a business plan that was thought-through, and they worked with all the parties and they executed it well," Wheeler said. "We have to realize that’s where the industry is going. We can’t just stick our head in the mud. We have to work with it. We have to make it work it."

Spotify's delay in coming to the United States is believed to be due to the company's business plan of offering a free option, and trying to essentially "sell-up" users. Major-label execs have cited concerns about the conversion rate from free customers to paying ones. Yet Wheeler noted that Beggars left Adele's "21" off of free streaming services, only making it available for premium subscribers. Labels, Wheeler said, will have to make those who pay feel as if they're getting a better service.

Additionally, services like Spotify might just be the magic bullet that ends -- or significantly curtails -- piracy. "If you actually have a service that’s engaging," Wheeler said, "that music on your hard drive is pointless."

Brooks then offered what could be a new major label model: "You’re not building a business on people who buy music. You’re building a business for people who love music."

-- Todd Martens

Photo: Jack White at South by Southwest. Credit: Joey Maloney for the Los Angeles Times